Cyprus has agreed to sell gold reserves to raise around €400m (£340.6m) and
help finance its part of its bailout, an assessment of Cypriot financing
needs prepared by the European Commission showed.

The draft assessment, obtained by Reuters, also said that Cyprus would raise €10.6bn from the winding down of Laiki Bank and the losses imposed on junior bondholders and the deposit-for-equity swap for uninsured deposits in the Bank of Cyprus.

Cyprus had originally agreed to contribute €7bn towards the cost of its bail-out via a €5.8bn levy on uninsured deposits and a new withholding tax on investment profits. The EU and International Monetary Fund (IMF) have agreed to contribute a total of €10bn.

However, Wednesday's draft showed that Cyprus's contributions had doubled, to €13bn, and the total price tag had increased to €23bn.

As well as raising more money from Cyprus's two biggest lenders, the country will also raise €600m from a hike in corporation tax, and €1.4bn through privatisations. Cyprus will also restructure the €2.5bn loan it granted Cyprus in 2011.

The new terms amount to a 10pc write down of the loan, according to Russian Finance Minister Anton Siluanov.

Cyprus' total bullion reserves stood at 13.9 tonnes at end-February, according to data from the World Gold Council.

Portugal holds 382.5 tonnes of gold, worth some €14.76bn at current prices, in its reserves, while Spain's holdings stand at 281.6 tonnes, worth €10.8bn.

Italy is the world's fourth largest gold holder, with 2,451.8 tonnes of gold in its reserves, worth €94.6bn.

Out of the total Cypriot financing needs of €23bn between the second quarter of 2013 and the first quarter of 2016, the eurozone bailout fund will provide €9bn, the International Monetary Fund €1bn and Cyprus itself will generate €13bn, the assessment said.

Meanwhile, S&P has revised its outlook for Cyprus to stable from negative. However, the ratings agency expects its economy to contract by around 20pc between 2013 and 2016.